Summary
The North Carolina Business Court denied Horacio Perez Duran’s motion to dismiss claims brought by John Russell Stoutt III concerning alleged breaches of a joint venture agreement and related misconduct involving P & S Landscaping, LLC. The court held that the fraud-particularity argument was abandoned, the statutory unfair-or-deceptive-trade-practices issue was moot after voluntary dismissal, and Stoutt had standing to pursue claims based on his individual contractual rights.
Topics
Practice areas
Questions Presented
- Whether the defendant's motion should be denied as untimely or treated as a motion for judgment on the pleadings.
- Whether the plaintiff abandoned the argument that the amended complaint failed to plead fraud with particularity by omitting that issue from the opening brief.
- Whether the plaintiff's voluntarily dismissed claim under North Carolina General Statutes section 75-1.1 presented a live controversy.
- Whether the plaintiff had standing to assert individual claims for breach of the Joint Venture Agreement and fraud based on the alleged breach, rather than claims belonging to P & S Landscaping, LLC.
Holdings
- The court could consider the motion because subject matter jurisdiction may be challenged at any time and the court could look past the motion's label and treat it as a motion for judgment on the pleadings under Rule 12(c).
- The plaintiff had standing to pursue claims for breach of his individual contractual rights under the Joint Venture Agreement and for fraud pertaining to that breach, even if P & S Landscaping might also have claims against the defendant.
- The motion to dismiss was denied.
Key quotations
“It is clear that Stoutt seeks to vindicate his own rights, not those of the company.” (¶ 9)
“For these reasons, the Court DENIES the motion to dismiss.” (¶ 10)
Factual background
P & S Landscaping, LLC was formed to operate a dirt-dumping business on land owned by Perez. Perez and Stoutt's son were equal members, while Stoutt served as the company's sole manager but was not a member. An Operating Agreement and a Joint Venture Agreement governed the parties' rights, including an alleged roughly fifty-fifty allocation of profits and expenses between Stoutt and Perez. After the parties' relationship deteriorated, Stoutt alleged that Perez took more than $750,000 in unauthorized distributions and concealed or misrepresented information concerning the alleged breach.
Procedural history
John Russell Stoutt III sued Horacio Perez Duran concerning alleged breaches of agreements governing P & S Landscaping, LLC, and asserted claims for breach of contract, unjust enrichment, constructive trust, fraud, and an unfair or deceptive trade practices claim. Stoutt voluntarily dismissed the section 75-1.1 claim. Perez answered the amended complaint and later moved to dismiss; the North Carolina Business Court denied the motion.